About: David Goguen

David Goguen is a legal editor at Nolo, focusing on claimants' rights in personal injury cases. He is a member of the California State Bar with over a decade of experience in litigation and legal publishing. David is a graduate of the University of San Francisco School of Law.

Recent Posts by David Goguen

If you received one of those annoying “CP2000” letters from IRS recently, be on notice that the interest they may have charged you on that notice was incorrectly calculated – the amount was too low!

A CP2000 is a standard form letter on which IRS asserts difference(s) between amounts reported by a taxpayer on his return, and amount reported by banks, employers and other payors. If IRS thinks you owe, they simultaneously bill you for the related interest. But on notices sent during the last two weeks, IRS’ interest calculations were wrong – and be assured, you will receive another notice with the correct interest amount, says IRS.

The politicians are often worked up about the high corporate tax rate in the U.S. – 35% is the number you always hear.

But a recent Government Accountability Office (GAO) report points out that the “effective” tax rate paid by corporations can and often does differ from the statutory marginal rates. GAO notes that the profitable larger U.S. corporations paid federal income taxes for 2010 at an effective rate of 12.6% of the worldwide income they reported on their financial statements. This is slightly lower than the 13.1% rate based on current federal tax expenses they reported in those financial statements, lower still than the 21% effective rate based on actual taxes and taxable income, and far below the top statutory rate of 35%. And including foreign, state and local corporate income taxes, these corporations paid income taxes for 2010 at an effective rate of 16.9% of their reported worldwide income.

Every year IRS publishes its list of the most obnoxious tax scams for the year – taking the name from a famous movie of decades ago: “The Dirty Dozen.”

It’s always amusing to review the list, while at the same time recognizing that there are real crooks out there, trying to steal not only from unsuspecting taxpayers, but also from Uncle Sam himself.

“Taxpayers should be careful and avoid falling into a trap with the Dirty Dozen,” says IRS Commissioner Doug Shulman. “Scam artists will tempt people in-person, on-line and by e-mail with misleading promises about lost refunds and free money. Don’t be fooled by these scams.”

Number one on this year’s list is identity theft, generally first brought to the attention of the target taxpayer who receives a notice from IRS that more than one return was filed in that taxpayer’s name or that the taxpayer received wages from an unknown employer. Folks who suspect for one reason or another, that their personal identity has been stolen and used for tax purposes should contact IRS – check out www.IRS.gov/identitytheft for the procedures.

And if you are interested in the rest of the “Dirty Dozen,” get hold of IRS News Release 2012-23, issued just last week.

When you file a joint income tax return, the law makes both you and your spouse responsible for any tax debts and other liability. Innocent spouse relief is meant to help taxpayers who didn’t know — and had no reason to know — that their spouse was underpaying taxes or failing to pay taxes altogether. Until this week, people trying to qualify for equitable relief as an innocent spouse had to file their request within two years of the time that the IRS’s collection efforts first began.

So, what was the problem with the old two-year limit? It wasn’t unusual for a truly innocent spouse to be unaware of their not-so-innocent spouse’s tax problems (including the IRS’s collection efforts) for over two years. And under the old rules, if you discovered your spouse’s wrongdoing too late (after that two-year window had closed), the IRS said your innocent spouse claim was SOL.

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About Jeffrey A. Quinn

The Tax Law Tips blog is written by Jeffrey A. Quinn of Ashley Quinn, CPAs and Consultants, Ltd. (with contributions from Nolo editors). Jeff is a Certified Public Accountant in both Nevada and California, with more than 40 years of experience in providing professional accounting and tax services. Jeff is also a contributor to Nolo's Tax Savvy for Small Business. A member of both the California Society of Certified Public Accountants and the American Institute of Certified Public Accountants, Jeff holds a M.S. in Taxation from Golden Gate University, and a B.S. in Accounting from the University of San Francisco.

Ashley Quinn, CPAs & Consultants, Ltd. is a Nevada-based specialty firm of Certified Public Accountants and Consultants serving individuals, families, and businesses in a multi-state environment.